Photograph by: Jonathan Hayward
, THE CANADIAN PRESS

B.C. and Alberta agreed to a framework Tuesday that they say opens the possibility of heavy oil pipelines being built to the B.C. coast.

At stake are two projects — proposed by Enbridge and Kinder Morgan — totalling nearly $12 billion that would transport more than one million barrels of oil to Kitimat in northern B.C. and Burnaby in the Lower Mainland.

The projects would create thousands of construction jobs and hundreds of permanent jobs, and most importantly to Alberta and its oil producers, open up new, lucrative markets in Asia.

The projects have been strongly opposed by First Nations, environmental groups and some northern and Lower Mainland municipalities, including Vancouver. The opposition focuses on the significant jump in tanker traffic off the B.C. coast that would increase the potential for a devastating spill.

B.C. Premier Christy Clark acknowledged that none of the province’s five conditions to build an oil pipeline have been met, but stressed Alberta’s agreeing to all five conditions in principle is an important step.

“I can remember two years ago, lots of folks, some of you might have been among them, said that these five conditions will never be accepted by anyone in the country,” Clark said at a joint news conference in Vancouver with Alberta Premier Alison Redford.

Asked how much closer Alberta is to being able to move oil to the coast, Redford said she’s excited to “know that in each of those areas (five conditions) there is the possibility for progress.”

The B.C. Liberal government’s five conditions include the passing of an environmental review, creating world-leading marine and land spill prevention and recovery systems, addressing First Nations’ rights and receiving a fair share of economic benefits.

The issue of economic benefits has always been a sticking point for Alberta, which has now agreed that B.C. has the right to negotiate with industry for additional benefits.

Clark had already agreed last spring that Alberta’s royalties and other taxes were off the table.

With Alberta royalties and taxes off the table, Clark said there are other possible economic benefits including an oil refinery with up to 3,000 jobs, or tapping into federal revenues or company profits, possibly through charging fees on oil transported in B.C.

B.C. has also agreed to endorse Redford’s Canadian Energy Strategy, an effort to find a way to get Canada’s oil to export markets and reduce the time it takes to review projects. The strategy also promotes green energy and reducing carbon emissions.

The surprise agreement came after both sides said Monday night they had cancelled the scheduled Tuesday meeting because there was not enough progress following the creation of an inter-provincial working group that was grappling with how to find common ground on B.C.’s five conditions.

The B.C. Chamber of Commerce welcomed the announcement, saying it hoped it would create new momentum for the Enbridge and Kinder Morgan projects.

“This pivotal agreement creates a foundation for economic growth in the resource-based economies of B.C. and Alberta,” John Winter, president and CEO of the B.C. Chamber, said in a statement.

Canadian Association of Petroleum Producers vice-president Greg Stringham said the industry believes significant benefits can already be generated from pipelines under the present system. “At this point, we’re not going to push anything off the table. That doesn’t mean we are accepting them either,” said Stringham, referring to B.C.’s call for additional benefits.

Stringham also noted that building a refinery in B.C. is a tough proposal to make happen today, but not impossible.

It would take provincial, federal and industry support, he said.

NDP leader Adrian Dix said at a news conference Tuesday the B.C. government has changed its position on pipelines and that British Columbians were misled during the last election.

Dix said on the issue of revenues for B.C., the government has always had the power to charge money for moving oil to the west coast.

“There’s nothing in this agreement that provides any new resources or anything with respect to addressing an oil spill issue that the government of B.C. believes is a problem. And what a shame,” said Dix, who announced recently he will step down as Opposition leader following his election defeat last May.

First Nations called Alberta’s acceptance of B.C.’s conditions “significant” but are skeptical the provinces will be able to satisfy the conditions.

Coastal First Nations executive director Art Sterritt noted there’s no way to satisfy their concerns over marine oil spills, given that even under the best of conditions only 10 to 15 per cent of oil could be recovered under world-leading response systems. “I think our premier is, perhaps, playing Redford a bit because Redford might think these are achievable,” observed Sterritt.

He also noted that if Alberta is agreeing to support B.C. going after industry for money, possibly through toll charges on oil flowing through pipelines in B.C., Alberta is going to take a revenue hit.

The Alberta Federation of Labour made a similar warning, noting that under Alberta’s royalty framework, pipeline tolls are deductible from royalties oil companies pay into the province’s coffers.

“It is entirely inappropriate for a neighbouring province to attempt to grab value from the resources that belong to Albertans,” AFL President Gil McGowan said in a statement.

“This deal could make Alberta’s budget deficit worse, it will undermine public services.”

Asked whether it was fair that B.C. potentially wants to tax Alberta oil travelling through B.C. when Alberta does not do the same to B.C.’s natural gas moving through Alberta, Redford said that’s a discussion for the province and the industry where the pipelines are being built.

“It will be up to each company putting that infrastructure in place to make the decision as to whether or not they can move forward based on the economics of the project,” said Redford.

Environmental groups such as Living Oceans Society, the Dogwood Initiative and Friends of Wild Salmon stressed the agreement doesn’t change opposition to oil pipeline and tanker projects in B.C.

“Quite apart from the impossibility of cleaning up spilled bitumen, there remains the completely unaddressed opposition of First Nations and a majority of British Columbians to seeing supertankers on the B.C. coast,” said Karen Wristen, executive director of the Living Oceans Society.

Gerald Amos, chair of Friends of Wild Salmon, said it would be a “massive betrayal” if this deal cleared the way for Enbridge’s $6.5-billion Northern Gateway project in northern B.C.

Enbridge, which expects a federal panel decision on its project by the end of the year, said it was encouraged the two provinces continue to work together.

Enbridge spokesman Todd Nogier, however, would not say whether the company was open to being charged some kind of additional pipeline fee by to B.C. to meet the province’s economic benefit condition.

“In terms of specifics, we look forward to continuing our dialogue with the B.C. government,” Nogier said in an email.

Also at issue, is Kinder Morgan’s $5.4-billion expansion of its Trans Mountain pipeline to Burnaby. That project has just started the federal review process.

Oliver noted the Conservatives have always supported B.C.’s first four conditions, but that B.C.’s call for additional economic benefit was an issue for the two provinces to discuss.

“They discussed and they’re arrived at an agreement, and I view this as a very constructive development,” he said.

Ottawa has already taken steps to improve pipeline and tanker safety, including an increase in fines for pipeline operators, and a promise to increase inspections for the pipeline industry.

NDP House leader Nathan Cullen, who represents the Skeena-Bulkley Valley riding that Enbridge’s Northern Gateway pipeline would traverse, said the accord confirms Clark’s “betrayal” of an election promise.

“It’s a complete sellout. I don’t know exactly what Christy Clark gained,” said Cullen, who is considering a switch to provincial politics to run in the NDP leadership race to replace Adrian Dix.

“She lied in the last election, and made everyone believe something that just wasn’t true, that she was going to defend British Columbia. But I just don’t see it here,” he said.

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